Compensation in the asset management industry in 2006 is expected to increase by 5% to 15% over last year, according to a new report from Johnson Associates, a compensation consulting firm. Traditional equity money managers will see a 10% to 15% overall increase in their compensation this year, Johnson Associates estimated, based on strong net inflows and market appreciation seen in the first quarter. Hedge fund managers will receive an estimated 15% increase in compensation, based on first-quarter net inflows. Fixed-income managers will receive an estimated 5% increase in pay, with net outflows and rising interest rates depressing overall compensation.
Money managers for international strategies will likely receive a greater compensation increase than managers of domestic strategies, with growth in Asia, Europe and emerging markets outpacing growth in the United States, according to the report.